Plus, negotiations have begun on Republicans’ new coronavirus relief bill, McDonald’s said second quarter revenue dropped 30%, and DraftKings inked a new deal with the PGA Tour.
Stocks were lower to start Tuesday with the Dow falling 157 points, or 0.6%. The S&P 500 slipped 0.4%, while the Nasdaq dropped 0.6%.
Senate Majority Leader Mitch McConnell unveiled Republicans’ coronavirus relief plan late Monday. The plan includes another $1,200 direct payment to Americans making less than $75,000, reduces the federal unemployment benefit to 70% or a worker’s previous wages, or at $200 per week from the $600 per week that expired this week, sets aside another $190 billion for Paycheck Protection Program loans, provides $105 billion to help schools reopen in the fall, and includes $16 billion to help states boost COVID-19 testing capacity, among other provisions. House Majority Leader Nancy Pelosi called the GOP plan a “pathetic” piecemeal approach that isn’t adequate to address the country’s needs. “Having said that, we are going to see if we can find some common ground,” Pelosi said. “But we are not there yet.” Pelosi and Senate Democratic leader Chuck Schumer met with Treasury Secretary Steven Mnuchin and White House Chief of Staff Mark Meadows Monday night, and negotiations are expected to continue today. Elsewhere, the Fed today extended its coronavirus emergency lending programs through the end of 2020 as the economy continues to struggle amid the pandemic. “The three-month extension will facilitate planning by potential facility participants and provide certainty that the facilities will continue to be available to help the economy recover from the COVID-19 pandemic,” the Federal Reserve said in a statement this morning.
Florida reported a record number of coronavirus deaths and hospitalizations today as the U.S. surpassed 4.3 million confirmed cases. Two of the country’s top infectious disease experts said that even with a coronavirus vaccine, “there is no going back to normal anytime soon.” “Prepare for at least eight to 12 months of this situation,” said Thomas Frieden, former director of the Centers for Disease Control and Prevention. Michael Osterholm, director of the Center for Infectious Disease Research & Policy at the University of Minnesota, said that around 7% to 9% of the total U.S. population has been infected with coronavirus, and that means the worst is yet to come. “The pain, suffering, death and economic pain we’ve had to date – that’s 7% to 9% of the U.S. population. We’ve got a long way to go” to get to herd immunity, Osterholm said. “COVID is here to stay,” Frieden said, while Osterholm added, “We will be dealing with this forever.”
Eastman Kodak shares are up more than 230% this morning after news broke that the company has signed a deal with the U.S. government to help produce pharmaceutical ingredients. The Wall Street Journal reported Kodak has been awarded a $765 million government loan under the Defense Production Act to help speed up domestic production of drugs that can treat different medical contentions and lower reliance on foreign sources. As of Monday’s closing, Kodak’s market value, including debt and preferred stock, was less than $300 million.
McDonald’s shares are down nearly -3% this morning after the fast food giant said revenue fell 30% in its latest quarter. “In many markets around the world, most of notably in the U.S., the public health situation appears to be worsening,” McDonald’s CEO Chris Kempczinski told analysts. “Nonetheless, I believe that Q2 represents the trough in our performance as McDonald’s has learned to adjust our operations to this new environment.” McDonald’s reported earnings per share of $0.66 on revenue of $3.77 billion, compared to analysts’ estimates for earnings per share of $0.74 on revenue of $3.68 billion. 3M shares are down -5% after it reported earnings that fell just short of analysts’ expectations. The industrial conglomerate reported earnings per share of $1.78 on $7.2 billion in sales, compared to analysts’ expectations for earnings per share of $1.80 on sales of $7.3 billion. “While our results were significantly impacted by the global economic slowdown, we executed well, managed our costs and delivered another quarter of robust cash flow,” said 3M CEO Mike Roman in the company’s news release. And Pfizer shares are up 3.75% after it reported better-than-expected second quarter earnings. The pharmaceutical giant posted adjusted earnings of $0.78 on revenue of $11.8 billion, compared to Wall Street estimates for earnings per share of $0.66 on revenue of $11.5 billion. Pfizer also raised its full-year outlook, and said it expects to earn $2.85 to $2.95 per share from a previous forecast of $2.82 to $2.92 per share, and said it expects to generate $48.6 billion to $50.6 billion for 2020, up from previous guidance of $48.5 billion to $50.5 billion.
And DraftKings shares got a slight boost this morning after the betting company announced it has secured a deal with the PGA Tour that makes DraftKings the organization’s “first betting operator.” “The PGA Tour couldn’t be more pleased with growing our collaboration with DraftKings,” said Norb Gambuzza, PGA Tour senior vice president of media and gaming, in a statement. “The expansion of the relationship to now include sports betting is a natural evolution and one which fully supports and promotes the PGA TOUR’s objectives of reaching and engaging new segments of fans while introducing them to our players, tournaments and media platforms.” As part of the agreement, DraftKings will have the right to use PGA Tour trademarks a well as advertising options on Tour platforms. “Golf has been an especially important outlet for fan engagement over these past few months, and this latest collaboration is a significant next step for both the golf and gaming industries,” said Ezra Kucharz, Chief Business Officer of DraftKings, in a statement.
Stocks We’re Watching
Tudor Gold Corp (OTC: TDRRF): Tudor Gold shares gained as much as 22% yesterday after the miner said that it has completed the second set of diamond drill holes at their flagship property, Treaty Creek. “For the second time this month, we are very pleased to have bettered the results obtained earlier from GS-20-57 which has an enriched interval that averages 1.40 gpt AuEq over 217.5 meters (544.5 to 762.0 meters) within an overall composite average of 0.845 gpt AuEq over 973.05 meters (34.50 to 1077.55 meters),” said Tudor Gold Vice President of Project Development, Ken Konkin. The focus for the rest of this summer will be to complete the exploration drilling to the limits of the known mineralization along the north-eastern axis. We have begun drilling on Pad 8 which is a 150 meter north-easterly step out from hole GS-20-47, which was the best intercept generated in 2019 where we obtained an intercept of 0.697 gpt AuEq over 1081.5 meters. That hole stopped in mineralization as it was the limit of the drill’s capacity. This year all six drills have modified heads to complete drill holes in excess of 1,800 meter depths. However, we anticipate that our longest holes for 2020 will be approximately 1,400 meters long.”